UK government 'should provide more clarity for power sector beyond 2020'

8 September 2013


An independent report compiled by independent think tank Carbon Connect and published on 4 September outlines the important role that renewables can play in the UK's transition to a low carbon electricity supply over coming decades. The report, sponsored by Siemens and DONG Energy, is part of an independent inquiry series, sponsored by the Institution of Gas Engineers and Managers. The Future Electricity Series brings together experts from parliament, industry and academia to build consensus, lay down the facts and point to policy challenges in the power sector.

It concluded that:
- Government should work with industry to narrow the debate by identifying 'low regrets' investments for the power sector beyond 2020.
- UK has only just begun to harness low carbon renewable resources bigger than North Sea oil and gas.
- New biomass policies are a pragmatic balance between environmental protection, building public confidence and encouraging sector growth, and will help debate move forward.
- Investing in renewables through electricity bills has 'hidden' benefits that could avoid high bills in the long term, make bills more predictable and deliver wider economic benefits.
- Backing up wind and other varying renewables is a manageable challenge for the UK electricity system with a number of existing and developing technology options.
 
The inquiry says that government could do more to narrow the scope of debate about technology mix beyond 2020. It argues that it should work with industry and academia, first to establish 'low regrets' levels of technology deployment, and second to ensure that policies are in place to incentivise investments, such as supply chain investment, needed to deliver these low regrets actions.
 
This approach would help provide the longer term clarity that could secure supply chain investments giving the UK a head-start in the global race. The report finds that these investments could be missed, delayed or more expensive if there insufficient confidence about long term demand for key technologies such as offshore wind. Work by Government to help incentivise these investments would increase the likelihood that technology cost reductions are achieved and help mitigate against high costs if new nuclear or carbon capture and storage development fails or is delayed.
 
On affordability, the report finds that avoiding bill increases driven by fossil fuels, making electricity bills more predictable and providing an economic boost are some of the 'hidden' benefits that the UK could see from investing more in renewables through electricity bills between now and 2020. The extra money paid to support renewables and other low carbon generation such as nuclear power could be more than offset by energy efficiency savings, although Government needs to do more to show how these savings will arise.
 
On sustainability, the report tackles myths about the carbon emitted in manufacturing renewable technologies or in backing up varying technologies such as wind, solar, wave and tidal. It finds that even when considering these factors, renewables are still amongst the most low carbon options.
 
The report also looks at the sustainability of electricity from biomass. Bioenergy overall could provide up to ten per cent of energy and reduce the cost of cutting carbon by £44 billion per year in 2050. The Government's new biomass policies are a pragmatic response to concerns about the sustainability of biomass power, which balances protecting the environment, building public confidence and enabling the sector to grow.
 
On security of supply, the inquiry says that debate should focus on the whole electricity system and that individual technologies should be considered in the context of how they add to or reduce system risks.  Considered like this, renewables reduce some risks, such as fuel supply risks, which caused concerned last winter, and add to others, such as system balancing risks. System balancing risks from varying renewables (wind, solar, wave and tidal technologies) are manageable using a number of existing and developing technologies.
 
Peter Hardy, head of Technical Services at IGEM, sponsor of the inquiry series, said:
 
"The report's conclusion that individual technologies must be considered in the context of the energy system as a whole is crucial to the UK's energy future. Expanding the proportion of renewables in the power mix is indispensable for long term energy security, sustainability and affordability, and the report explores how this might be achieved economically. Natural gas will also have a crucial role in the power generation mix as a bridging role for at least decades to come, and the report highlights the valuable experience and expertise the gas industry can contribute to the further development of renewables."
 



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